How to Buy Multiple Mutual Funds from a Single Online Platform?

Actual Question:

What is the best online platform to buy mutual funds? Is it possible to buy multiple mutual funds from a single platform? If yes, how to buy form an online platform?

Answer:

Dear Friend!

Best Online Platform:

It is not possible for me recommend the best online platform for buying mutual funds. In order to do that one should have the personal experience of having used many platforms, which is not practicable. 

In my opinion all major online platforms sponsored by reputed institutions should provide good services. Following platforms I have used and can say are good:

• Kotak Securities - an offshoot of Kotak Mahindra Bank: https://www.kotaksecurities.com/
• India Infoline: https://ttweb.indiainfoline.com/trade/Login.aspx 

Is it possible to buy multiple mutual funds from a single online platform?

The answer is a definite YES.

Please see the following screen picture from Kotak Securities:

How to Buy Mutual Funds Online:

Please note that all the steps described here are as to be followed with Kotak Securities trading account. Other platforms may have different procedures/ steps and screens.

Before you can buy mutual funds online, you should have completed the following prior formalities:

1. Opened an online trading account with a stock broker.
2. Opened an account that keeps the mutual funds in a dematerialised form in a special account which is popularly known as demat account.
3. Your Power of Attorney (POA) in favour of the broker has to be registered with the Registrar and Transfer Agent of all the mutual funds. This your broker will take care of with your consent but the process may take three to four working days. When you are buying for the first time and if you are not so registered, you may see a screen as follows:

Now you are ready for buying mutual funds online. lets start.

Step 1/ Screen 1: Login

Log in to your trading account using the login ID, password and the transactional one-time-password (OTP). Please note that the OTP requirement may not be involved in a few platforms or there may be any other method of verification.

Step 2/ Screen 2: Select "Trade Now"

On the top lefthand side corner choose the option "Trade Now" and you will enter the following step/ screen.

Step 3/ Screen 3: Select "Place Order"

When you click on the option "Place Order" the following menu screen displaying various options like 'Equity', 'Derivatives', 'Mutual Funds' and so on will open.

Step 4/ Screen 4: Select "Purchase"

Please click on the button "Purchase" listed under the main head, 'Mutual Fund'.

Now the following screen listing various mutual fund categories of various funds will open.

Step 4/ Screen 4: Select "Action"

Please note that a menu table with five mutual fund types or categories, with various schemes sponsored by multiple funds are listed under each category. You have a really wide variety of schemes to choose from.

Under each  fund scheme you have following two action choices are in front of you:

1. Buy: This is meant for an one time buying of mutual fund
2. SIP: Option to subscribe to a systematic investment plan (SIP) - once you choose this you are committing to a regular purchase, usually monthly.

What type of mutual fund to choose?

As I have repeated many times before for real long-term wealth creation you should only choose a well diversified, low-cost, equity, index fund.

Suggested Further Reading:

• Types of Mutual Funds
• How to Choose the Right Mutual Fund to Invest?
• How Frequent Changes to Mutual Fund Portfolio Affect Investor Interest?

In conclusion you can indeed invest in multiple mutual fund schemes from a single online platform and we hope you have learnt how to buy from this article.

Thank you,

With Best Regards,

Anand

How to Start Investing in Mutual Funds?

Actual Question:

How do we start investing in mutual funds, and which types of mutual funds are there?

Answer:

Dear Friend!

Even though the easiest way would be to pick the phone and call a mutual fund for doorstep customer service, I would advice you not to do this. The marketing advisor from the fund, most probably knows nothing about investing and only blurt out prerecorded, jargon filled, platitudes about the schemes for which he or she has been given steep targets.

You must first know about what mutual funds really are, what kinds of funds are there and what schemes will suit you.

Since I have answered similar questions many, many times, instead of repeating myself, I will guide you to these previous answers. Please study them carefully:

• How Good are Investment Advisors?
• Definition of Mutual Fund
• Types of Mutual Funds
• How to Choose the Right Mutual Fund to Invest?
• How Frequent Changes to Mutual Fund Portfolio Affect Investor Interest?
• Miracle of Compounding

 I suggest that after carefully studying the above and other related posts, you please choose only a low cost, well diversified, equity mutual fund. Keep the investments intact for a very, very long time.

I once again repeat that please do not go by the advice given by marketing executives of the funds or so called advisors.

Thank you,

With Best Regards,

Anand

How to Invest in Overseas Stock Markets?

Investor's dream of overseas investments

Dear Friend!

Thank you very much for raising an issue that has deep impact on the wealth creation of Indians.

There are great businesses out there in highly innovative and enterprising countries like the US, UK, Germany and so on.

As an Indian investor you have two choices as follows:

1. Direct Investment in stocks trading on overseas stock exchanges.
2. Investing through India based mutual funds that provide opportunities to own overseas companies through the mutual fund route.

Now let us examine the feasibility and pros and cons of both the avenues in detail.

Direct Investment in Overseas Stocks:

Investing abroad is feasible only when a country’s currency is convertible on the capital account. Indian ‘Rupee’ is still not totally convertible. However, the Reserve Bank of India (RBI) has permitted overseas investments by Indians in various classes of assets, including stocks up to a specified limit. It used to be US$ 200,000 per annum. I have to check what the latest limit is. This is a huge limit for an average Indian.

Having said this, I had personally explored the feasibility of investing directly abroad but found it practically not feasible for investors with limited investible means like me.

The hurdles were on account of:

Minimum Transaction value: Stock brokers lay down minimum transaction value ranging from US$ 1000–2000 which translates into a huge sum in India rupees.

Flat and high brokerage charges: Flat brokerage charges of US$ 10–20 were stipulated per trade/ transaction, which again is steep and unaffordable for Indian because of huge rupee-dollar exchange difference.

Steep Folio Charges for each scrip/ stock: The demat account (the account to hold stock in a de-materialised form) folio charge for each scrip, which is payable every year was again very high.

In conclusion, direct investment in stocks abroad is practically ruled out for small Indian investors.

Indirect Investment Through Mutual Funds:

I understand that a few funds who have set up shop in India are offering opportunities to invest abroad through the mutual funds route. Following are a few examples:

• Motilal Oswal Nasdaq 100 ETF
• ICICI Prudential US Bluechip
• Franklin Feeder US Opportunities
• DSP BlackRock US Flexible Equity

I am keen to explore this avenue but actually could not find the time to actually implement it.

Please read the interesting article “Be Indian, buy American” by Value Research.

In conclusion, it looks impractical for small Indian Investors to invest in stocks directly abroad but very much feasible through the mutual funds route.

Suggested Further Reading:

• What are the Hurdles to Invest and Earn Dividends from Foreign Markets?

To summarise it is indeed feasible to invest in overseas stock markets and one should certainly invest overseas to partake in global opportunities as well as a diversification or de-risk strategy.

Thank you,

With Best Regards,

Anand

How to Calculate Book Value Per Share?

Book Value Per Share - Concept and Formula

Calculating book value per share is quite simple. There are two distinct ways to obtain the results, as follows, from the:

1.     Assets side of the Balance Sheet

2.     Liabilities Side

Let us take a practical example. Below we present the actual summarised balance sheet of the popular share SJVN Ltd.

SJVN LIMITED Balance Sheet as on 31st March 2015 (Rs. in Crores [1 Crore = 10 Million])
ASSETS		LIBILITIES
Fixed Assets	9,304.74	Equity Capital	4,136.63
		Reserves and Surplus	6,066.41
Non-Current Investments	11.38	Net Worth	10,203.04
Long-term Loans and Advances	188.84
Other non-current assets	286.35	Long-term borrowings	2,453.42
		Other long-term liabilities	945.31
Current Assets	4,802.92
		Short-term borrowings	0.00
Intangible Assets	0.22
		Other Current Liabilities	992.68
Total Assets	14,594.45	Total Liabilities	14,594.45

Follow the six easy steps given belo:

Method 1: From the Assets Side of the Balance Sheet:

Step 1

Ascertain the total value of all assets from the firm’s ‘Balance Sheet’.

Rs.14,594.45 Crores

Step 2

Deduct following intangible assets, if any, from the total value of assets, to obtain value of total tangible assets:

1.     Goodwill/ Acquisition Goodwill/ Cost of Control

2.     Brand Value

3.     Preliminary and pre-operating expenses

4.     License fees/ lump sum royalty fees

Tangible Assets = Rs.14,594.45 – 0.22 = 14,594.23 Crores

Step 3

Determine the total outside liabilities – that is all liabilities and dues payable to outsiders other than shareholders – that is all liabilities other than net worth.

Total Outside Liabilities = Rs. 14,594.45 – 10,203.04 = 4,391.41 Crores

Step 4

Deduct total outside liabilities from total tangible assets and obtain the value of net assets.

Net Assets = Rs.14,594.23 – 4,391.41 = 10,202.82 Crores

Step 5

Find out the total number of equity shares. This can read directly from the schedules or by dividing the value of equity capital by the face value of the share.

Total Number of Equity Shares = Rs. 4,136.63 ÷ Rs.10 = 413.66 Crores

Step 6

Calculate the book value per share by dividing the net assets by the total number of equity shares.

Book Value Per Share = Rs.10,202.82 Crores ÷ 413.66 Crores = Rs.24.66

Method 2: From the Liabilities side of the Balance Sheet

Step 1

Ascertain the net worth. This is the sum of value equity share capital and reserves and surplus.

Net Worth = Rs. 4,136.63 + Rs. 6,066.41 = Rs. 10,203.04 Crores

Step 2

Deduct value of intangible assets from the net worth to obtain tangible net worth.

Tangible Net Worth = Rs.10,203.04 – 0.22 = Rs.10,202.82 Crores

Step 3

Divide the tangible net worth by the total number of equity sahres (Step 5 of Method 1) to obtain the book value per share.

Book Value Per Share = Rs.10,202.82 ÷ 413.66 = Rs.24.66

Recommended Further Reading:

• Balance Sheet
• Asset
• Liability
• Tangible Assets
• TOL/ TNW Ratio
• Price to Book Value
• What is ‘Price to Book Value’?
• What are the Best Price-to-Book Value Stocks?
• How to Find The Fair Price of A Stock?